MELBOURNE, Australia (AP) — Australia and Japan signed contracts on Saturday to deliver the first three of a 10 billion Australian dollar ($6.5 billion) fleet of Japanese-designed warships, with the first due for delivery in three years.

Mitsubishi Heavy Industries will build the first three Mogami-class frigates in Japan. Australia plans to build another eight in a shipyard in Western Australia state.

Japanese Defense Minister Shinjiro Koizumi and his Australian counterpart Richard Marles attended a signing ceremony aboard the Mogami-class frigate JS Kumano, which is part of the Japan Maritime Self-Defense Force, docked off the Australian city of Melbourne.

The Kumano had taken part in the recent Exercise Kakadu, biennial multinational maritime drills hosted by Australia.

Australia announced in August last year that the Japanese bid had won the contract to provide Australia’s next generation of general purpose frigates over Germany’s MEKO A-200 from Thyssenkrupp Marine Systems. The deal gave a major boost to Japan’s still-underdeveloped defense industry after it lost out on Australia’s submarine contract to a French company in 2016.

The Japanese-designed fleet will replace Australia’s ageing ANZAC-class frigates that are considered increasingly vulnerable to modern missile and drone attack.

Marles said the Japanese frigates were a major step toward delivering Australia with a larger and more lethal surface combat fleet. The first of the Mogami-class frigates is due to arrive in Australia in 2029.

“The timeframe that we’ve announced is the fastest acquisition of a surface combatant into service in the Royal Australian Navy ever, and so this is a very rapid timeframe,” Marles told reporters.

Japan has been accelerating its military buildup while expanding its defense ties beyond its only treaty ally, the United States. It now considers Australia to be a semi-ally.

Marles said Australia welcomed Japan’s relaxation of export controls on defense equipment and technology with “trusted partners like Australia.”

“Japan is an industrial powerhouse and it offers so much opportunity for Australia and the development of our own defense industry as the Mogami project represents,” Marles said.

Koizumi said that the introduction of Japanese vessels into the Australian navy meant “a major step is finally being taken to elevate our bilateral defense cooperation to a greater height.”

He said Japan continued to be Australia’s “indispensable partner” in a new Australian defense strategyannounced this week, in which AU$53 billion ($38 million) will be added to the defense budget over a decade.

Koizumi said a “decisive factor” in Australia choosing the Japanese frigate was that it could be operated with just 90 personnel, around half the crew of Australia's current ANZAC-class version.

Australia says its Mogami-class frigates will be equipped with surface-to-air and anti-shipping missiles and could operate combat helicopters. They will be crewed by 92 sailors and officers.